Tag: Pandora

Already the place where users went to listen to music, it was easy enough for platforms to become the discovery platform of choice for their users. Spotify’s Discover Weekly hit 5 billion listens just 10 months after launching. With just about 100 million users, that’s about 50 new songs discovered via Discover Weekly per Spotify user.

Now labels have effectively become data companies, looking to the streaming platforms to find the new hot artists. Instead of sending A&R teams out to discover new acts, they monitor things like listens, adds, and skips across platforms to see which artists are worth signing.

The new promotional tools are rolling out on the heels of Pandora’s first direct-licensing deals with the major record labels in its nearly 17-year history. Pandora struck the deals in order to launch an on-demand, $10-a-month subscription offering—due out by year’s end—that would compete with services such as Spotify AB, Apple Inc.’s Apple Music and the new Amazon Music Unlimited.

Until this year, Pandora’s relations with the major labels had been chilly as it used government-mandated licenses to play its 2 million-track catalog at federally set rates for its nearly 80 million free listeners.

Subscription services have room to grow, particularly if they can deliver to consumers the right product at the right price. Music streamers have had to choose between paying nothing (for limited feature sets) and $10 per month (for the premium product) with almost nothing in the middle.

Reaching the middle of the market will require some flexibility on product and price.One approach has been Pandora Plus, a mid-tier, $4.99-per-month product with half the price of a premium on-demand service, unlimited skips and no advertisements. The kicker is a new feature not available to either the free, ad-supported product or the previous incarnation of the ad-free product, Pandora One.

Last week Pandora announced direct licensing deals with all 3 major label groups, Merlin and more than 30 independent distributors and labels, including The Orchard and CD Baby. These deals enabled Pandora to launch new interactive features and a new $5 tier last week, and paved the way for a full Spotify-like Pandora on-demand streaming music service later this year.

A major side effect of these direct deals is that streaming on Pandora is no longer subject to the statutory rates set by the U.S. government and payable via SoundExchange. Not only is this a major loss of income for SoundExchange, it also removes an important layer of protection and oversight that the not-for- profit performing rights organization provided artists.

Most Pandora users won’t be able to listen to the service today: A Pandora rep says the service is going live to about 1 percent of its user base today and won’t fully roll out to all of its users for another month or so.

In the meantime, Pandora is still negotiating with Warner Music Group, the remaining big music label that hasn’t signed a deal with the streaming service. Sources say the two sides have an agreement in principle, but were still papering the deal late last night — apparently Pandora didn’t want to wait before it announced the new service.

Pandora has released a relatively bizarre press release this morning, announcing that it has struck licensing deals with three of the four major recording industry entities — Universal Music, Sony Music and indie label trade body Merlin — as well as Sony-owned distributor The Orchard and “over 30 other independent labels and distributors.”

When asked why the release was issued despite lacking Warner Music’s signature, a Pandora rep says “we felt we had more than enough good news” and that Warner was fully aware that the release was being issued.

Liberty made an informal offer of $15 a share for Pandora, which was at the time a $1 premium on its current share price, however Pandora is reportedly holding out for $20. Liberty’s bid wasn’t some random shot in the dark. It was an attempt to add to its already extensive music holdings which include:

A 40% stake in Sirius XM;

A 34% stake in Live Nation;

A 7% stake in Indian streaming service Saavn

Add into the mix positions in around 10 telcos, minority positions in media companies such as Viacom and Time Inc and a potential merger with global mobile carrier group Vodafone and you have the makings of an end-to-end media-tech conglomerate. Or in today’s parlance, a full stack music company.